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I guess enjoy it while it lasts? OpenAI won't be able to subsidize that forever either.
by wsatb 3mo ago
I guess enjoy it while it lasts? OpenAI won't be able to subsidize that forever either.
- gck1 3mo agoNothing is subsidized. Subscriptions are profitable for both Anthropic and OpenAI. Anthropic wanting to switch billing to API rates is them just wanting to generate more profit.
- wsatb 3mo ago"Nothing is subsidized" is a wild take. They might be making money on some users, perhaps even most users, but certainly not all. Also, "subsidized" doesn't just mean on compute.
- y1n0 3mo agoThat's interesting. Do you have anything to back that claim up?
- gck1 3mo agoI do, and it's called DeepSeek's pricing table. At the same time, "subscriptions are subsidized" cohort have no data whatsoever, and yet they're in every thread. Granted, it could still mean that Anthropic just chooses to lose money - but that's Anthropic's choice. DeepSeek has proven that inference can be much, much cheaper than what Anthropic advertises on their API rates page.
- nickthegreek 3mo ago> Granted, it could still mean that Anthropic just chooses to lose money - Then the cost is being subsidized by investor capital, but it is still subsidized.
- rvnx 3mo agoand soon by everyone who is invested into the NASDAQ, some sort of exit scam, but with a real product though
- InsideOutSanta 3mo ago> Nothing is subsidized. Subscriptions are profitable for both Anthropic and OpenAI. Even if subscriptions are locally profitable (i. e., the cost of the subscription covers the cost of inference), they're still subsidized because they don't cover training and running the company; otherwise, these companies would be profitable.
- gck1 3mo agoI can see that being true, and it very likely is true. But isn't infinite VC money and no incentives to optimize operations the reason behind that? Take a look at China for example - they have no access to NVIDIA, so they're trying to build their own hardware, they have no unlimited funding, so they try to optimize things. And Anthropic is complete opposite of that - if NVIDIA were to triple their prices tomorrow, Anthropic would still pay them. In the end, either we all somehow go mad and start paying Anthropic tens of thousands of dollars per month so support this madness, or we will go with whoever isn't lighting cash on fire.
- re-thc 3mo ago> Take a look at China for example - they have no access to NVIDIA Not true. Stop following US media spam if needed. 1. Very recently, the US did close a loophole on sanctions that allowed Chinese companies to use NVIDIA hardware outside of China i.e. before that was closed they all had access. The trick was train outside, do adjustments, ship the disks back and use non-NVIDIA in China, but at least the training and endpoints not hosted in China could all use NVIDIA. 2. There's been plenty of reports including fines and bans e.g. to Supermicro on smuggling NVIDIA hardware to China. I doubt it has been stopped. You can't catch everyone.
- FrustratedMonky 3mo ago"Nothing is subsidized" So they are profitable? I think you are mismatching accounting terms. You can't say the 'subscriptions' are profitable without accounting for the cost of making the model that is the source of the subscription. They are heavily subsidized by the shareholders. Investing, running at a loss, with hope of some future profitability.
- gck1 3mo agoAnd yet, that is completely uninteresting to their user base. If saner factory can sell you the same tool at a fraction of the cost of a gold plated factory, your choice is going to be obvious.
- flatline 3mo agoI don't think anyone has a firm grasp on actual inference costs -- including the research and training that has gone into those models. We've got near-frontier capabilities from open source models from China at pennies on the dollar compared to US big tech rollouts. OpenAI and Anthropic are heavily subsidizing their inference -- no wait, they are charging the most they can get away with before going public. Where is the truth?
- MichaelMedbed 3mo ago[flagged]
- andrewmutz 3mo agoBoth can be true. They can be charging what the market will bear, and still be charging less than their costs of running it.
- wyre 3mo agoThere is no way I'm believing DeepSeek can charge less than $1 USD for their pro model while Opus costs over 25x more, yet their price is less than the cost of running it?
- kube-system 3mo agoIt would seem strange, if they were operating in the same economy, but they don't. DeepSeek operates in an economy with a high degree of central planning. China subsidizes strategic industries, and they have heavily done so with AI. And DeepSeek specifically has said they have no commercialization plans. For example: https://www.boc.cn/aboutboc/bi1/202501/t20250123_25254674.html https://www.boc.cn/aboutboc/bi1/202501/t20250123_25254674.ht...
- ChrisMarshallNY 3mo agoI'm planning on switching from the $20/month to the $100/month plan. It's worth it, and I can afford it, but I am not really the right type of user for token-based usage. It's all for personal and free work.
- micah94 3mo agoJust a personal anecdote but I have not hit any more thresholds or limits since switching to the MAX plan and so far, it's been worth it. But I do wonder how long even this will last...
- ygjb 3mo agoI think subscription models are sustainable, but longer term, we should probably expect to see more prompt optimization happening in the providers inference pipeline. For example, unless you explicitly tell the agent or API to use a specific model, fronting the inference layer with a caching prompt classifier to determine which model to use, and automatically select the lowest cost model would probably already save alot of money (IDK if Claude/OpenAI do this on the backend, but several services I have worked on do some things like this to reduce costs of delivery customer facing inference at scale).
- wahnfrieden 3mo agoChatGPT does this and codex will eventually. They’ve stated it’s the future.
- Majromax 3mo ago> fronting the inference layer with a caching prompt classifier to determine which model to use, and automatically select the lowest cost model would probably already save alot of money Unfortunately, that doesn't work within a single session. The K-V cache of a model is intertwined with the model's configuration. Switching models invalidates the cache, meaning everything up to the point of the switchover is processed like a new, uncached input token. Per Anthropic's pricing doc, an Opus 4.8 cache hit costs 50¢/MTok, while Haiku costs $1/MTok for uncached input. Model selection works best if sessions are short and self-contained, particularly if the first few interactions can reliably classify the model need. That probably covers most 'support chatbot' use-cases, but it doesn't describe the kinds of heavy agentic automation that really chews through token budgets.
- andai 3mo agoA few weeks ago they massively cut usage on free tier.
- windexh8er 3mo agoAgreed. I think the Chinese labs are proving that OpenAI and Anthropic don't have a moat in almost every aspect, especially pricing. I also think people are getting annoyed with the constant lift and shift. I've seen more folks drop Claude Code and Codex, specifically, because of the lock-in it provides the providers. I'm curious to see how people standardize on tooling adjacent and if Anthropic, Google or OAI move to block utilization akin to the games Anthropic has been playing as of late. I think the end game is routed model usage and SLMs. I think Apple is going to prove this in the consumer space pretty handily and I'm curious how the Android ecosystem responds since the hardware is considerably lacking in model performance. I think Apple has a huge opportunity here, as much as I don't like their current ecosystem of walled garden. They did position themselves very well with ARM and custom chips for their hardware. Hopefully the broader ecosystem of ARM and Linux are able to make some headway and we see a more formalized, and broadly accepted, architecture to capitalize on.
- maxdo 3mo agoI see exactly opposite . Chinese models fails under any complex scenarios, while us labs raise the price , that's a sign of confidence.
- re-thc 3mo ago> while us labs raise the price , that's a sign of confidence Regardless of what others are doing, US labs here are just rushing to IPO. It's NOT a sign of confidence. It's the equivalent of saying you have confidence in SpaceX making revenue by renting out their data center (instead of their AI making bank).
- maxdo 3mo agogoing to IPO is a sign of confidence , you need to report a lot of things, that private companies don't. This is an exact reason chinese labs do not rush to go public. They wish to go , but money flow that is not as good. On the same note. if spacex is doing datacenters on earth successfully what's wrong with that? They rented cloud infra to a #2 or #3 provider in the world after < 2 years in business. It's a success, no?
- pyeri 3mo agoMy bet is they'll keep subsidizing for a considerable period of time, at least 1-2 decades more. Most AI companies are just testing the waters with paid tiers right now, their greatest fear with increased pricing is folks reverting back to wikipedia, stack-overflow and other public domain organic activity buzzing back to life; that will kill any RoI potential in LLMs forever. They're playing the wait game instead, observing how the digital sphere reacts to every little increase in price. If that weren't the case, they'd be pricing at lucrative premiums already and even gotten away in short-term considering the increased dependency in the enterprise world. But that'd be like killing for the golden egg too soon and losing all long-term potential. Once the folks are so addicted to LLMs that even writing a hello world program sounds like a nightmare and coming up with an article draft feels like reinventing Egyptian glyphs, that's when the real pricing hammer will come.
- wsatb 3mo agoAnthropic and OpenAI won't be around in 1-2 decades if this is their long term plan. People are not going to revert, but go elsewhere. China is proving that it can be done cheaper.
- raffael_de 3mo ago1 decade = 10 years ...
- jrflo 3mo agoOh for sure. I've been hopping around from provider to provider for the last few years just depending on who has the most capable / subsidized plans at the moment. I definitely expect there will be a squeeze on subscription costs all around the industry post IPO.